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Mobeus VCT exit: Baby Gro-Bag maker sold for £22 million

Archived article

Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.

Mobeus VCT portfolio company Gro-Group Holdings Ltd, the business behind the popular Gro Bag brand of baby sleeping bags, has been sold to Mayborn Group, the owner of the Tommee Tippee brand, for £22 million.

The deal is a full exit for the four Mobeus VCTs, which are set to realise around a 2.2x return on investment cost.

About The Gro Company

Founded in 2000, Exeter-based The Gro Company has established itself as a market-leading brand of baby sleep products. It pioneered the introduction of baby sleeping bags in the UK with its main brand Gro-Bag, a product recommended by baby safe sleeping charity The Lullaby Trust. The company’s product range now includes other Gro-branded sleep aids and sleep training products. It has expanded to become a global business, with offices in the UK, Australia and China.

Mobeus-backed MBO

Mobeus supported the management buyout of Gro Group in March 2013, following an introduction from Exeter-based corporate finance adviser Isca Ventures. Mobeus invested a total of £7.1m as a combined debt and equity finance package.

The four years and nine months since MBO has seen Gro launch a variety of new products and expand internationally to sell in over 25 countries including China and the USA.

Exit to Mayborn Group

Mayborn Group is the owner of Tommee Tippee, the most popular baby feeding bottle brand in the UK. Mayborn was itself acquired by Shanghai Jahwa Group last year, a Chinese cosmetics and health products conglomerate.

All four Mobeus VCTs realised their investment in Gro-Group Holdings Ltd. Excluding deferred consideration, the total cash proceeds received by the VCTs over the life of their investment in Gro-Group Holdings are £15.6 million, against an original investment of £7.1 million. This represents a return of 2.2 times the original cost and an IRR of over 20% for each VCT in the 4 years and 9 months that this investment was held.

Dave Gough, Chief Operating Officer at Gro, commented: “Gro has become a world class business that will continue to thrive under new ownership. With Mobeus’s support, we have been able to unlock Gro’s wider potential and achieve great things. We are delighted that Mayborn Group has recognised the quality of our business, the strong brand and customer base that has been built over the last seventeen years.”

Mobeus VCT offer

The four Mobeus VCTs currently have a joint offer for subscription, which has to date raised £66.2 million of a potential total of £80 million. For more details, please see the offer page.

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